The Financial Services Council (FSC) has renewed its warning that the Government's Future of Financial Advice (FOFA) bills, as currently drafted, will risk failing to achieve one of their key policy objectives – improving access to financial advice.
FSC chief executive John Brogden said that while the bills might achieve the objective of minimising conflicts in the financial planning industry, they were unlikely to improve access to financial advice.
"There will be fewer advisers providing advice – yes, in the best interests of their client – but at a higher cost and to fewer people," he told a FSC Deloitte Leadership Series luncheon.
"It would be a perverse outcome of FOFA if fewer Australians received advice because of these reforms," Brogden said.
The FSC chief executive also warned that intra-fund advice was not the answer to filling the expected financial advice gap. He argued that the only conceivable framework would be scaled advice.
However, he said this would only be achieved by a legal framework that allowed clients and their financial advisers to agree on the scope of the advice being sought.
Brogden said the FSC believed more than 80 per cent of the FOFA package would ensure Australians received better financial advice, but that there were factors which risked putting advice out of the reach of too many Australians.
Reflecting the fact that the FSC and other financial services bodies remain in discussion with the Government, Brogden said he was increasingly confident the Government would allow a 12-month transition for the FOFA bills, starting from 1 July this year.
"This recognises the significant investment and training required to implement these extensive reforms," he said.
